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Abstract
This paper uses a computable general equilibrium (CGE) model to investigate
the impact on poverty of trade liberalisation in Bangladesh. The simulation results show
that the complete removal of tariffs favours export oriented sectors in the economy. With
trade liberalisation, rural and urban areas experience an overall reduction in poverty in
the short run. However, a marginal increase in the poverty gap and poverty severity for
urban areas is projected, implying that the poor become poorer in urban areas. Moreover,
poverty incidences vary among various socio-economic groups. In the short run, poverty
incidence increases for rural landless and urban illiterate and low-educated household
groups. In contrast, the long run results highlight that trade liberalisation reduces absolute
poverty for all groups both in rural and urban areas.